It has been announced that in the last quarter of the year the first short term investment fund will be open, which will require a minimum investment of $500, and will be aimed at conservative investors.
The "Profitable Open Short Term Investment Fund" will be managed by the SGB Funds, so far the only company legally authorized to operate such a fund.Two other fund management companies are waiting to receive approval from the Superintendent of the Financial System in order to start operating.
The Banking Association has confirmed that the entities will not provide the Superintendent of Financial System with information requested from them on the 100 largest depositors of each entity.
Armando Arias, president of the Salvadoran Banking Association, said in an article on Elsalvador.com that "... they will respect the secrecy provisions of the Law on Banks and will not give to the Superintendency of the Financial System (SSF) confidential information on depositors, as this entity has requested."
The interest rate that the Government of El Salvado pays for money from the Pension Funds is not more than 1.3%, while international investors are paid more than 7%.
Ricardo Soriano, Chairman of the Committee for the Defense of Workers Pension Fund of El Salvador (Comtradefop) reported that since the year 2006, the State has forced the Pension Fund Administrators (AFP) to invest the money belonging to Salvadoran workers in Pension Certificates, initially 30% and the 45% in 2012, money which has suffered a loss greater than $938 million each year.
With amounts from $5 to over $50,000, people bought 1412 shares in Banco Azul which will begin operations in 2014.
This amount makes up the $60 million needed for the start of operations by the entity which was formed last September with a capital of $20 million. Of the 1,412 shareholders 97% are natural persons and 3% are companies.
The government of El Salvador has lowered the proportion of the portfolio that the Pension Fund Administrators can invest in securities of foreign companies from 20% to 10%.
The Financial System of El Salvador (SSF by its initials in Spanish) stated recently that the Administrators of Pension Funds may not invest more than 10 % in bonds or securities of foreign companies registered in the country, despite the fact that these are the entities which allow Salvadorans to earn 6% interest through investments.
In the last five years penetration of the insurance market did not reach even 2% of GDP because people see insurance as an unnecessary expense.
According to Richard Cohen, executive president of the Salvadoran Association of Insurance Companies (ASES), penetration of this market has the potential to grow up to four times in the next few years. However, this depends on intermediaries applying the best strategies to introduce the product, because they will be the ones to negotiate the best options for a policy with clients.
Detections have been made of cash transfers which are then returned via wire transfers and which apparently are linked to drug dealing and extortion.
The information was confirmed by the president of the Bank of Guatemala, Edgar Barquín, who explained that from Guatemala cash is exiting in dollars and going to El Salvador and then returning to the country through wire transfers.
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